All eyes are set to be focused on today’s Spring Budget, released at 12:30pm. The budget is expected to be the last major fiscal event before the next general election, with rumours now ramping up for a May General Election. The rumour mill over the past 48 hours has seen hints seemingly point towards further tax reductions as The Tories continue to fall further behind Labour in the polls.
We already know National Insurance cuts will follow, as well as an extension on the fuel duty freeze, providing further breathing space for consumers.
Regarding the rest of the budget, there’s hints at other area’s creating more help for the consumer, with a 99% mortgage scheme potentially being introduced for first-time buyers, reductions in Inheritance Taxes, Child Benefit Reforms and many more. Either way the budget could provide some volatility in and around lunchtime.
Later this afternoon we have The Bank of Canada’s Interest Rate decision at 14:45, with expectations that rates will stay on hold at 5%, even though Inflation for Canada has kept to its downward trend for the first month of 2024. BoC Governor Tiff Macklem stated in January that a surge in shelter prices is the primary driver of inflation climbing above the 2% target, also adding that the pathway towards 2% inflation would be a gradual journey with the odd shoot-up in data. It’s been argued that because of this, the rate staying at 5% is deemed necessary in order to curb further inflationary pressures.
Keeping with Interest Rates, we then have the European Central Bank’s rate decision tomorrow, again expected to keep suit with Canada and keep their rates on hold as economies globally are still grappling with high inflation pressures. We then see the release of the all-important jobs data and unemployment rate in the U.S. So the next 72 hours could see some vast movements on the currency markets in for GBP pairs.
